Job creation has slumped by a fifth across the country and is almost a third down on pre-recession levels in some areas, a report shows today.

A study for the TUC shows that the recent rise in employment is being driven by fewer people leaving their jobs rather than finding new work.

The number of people starting a new job within a three-month period is currently around 20% below pre-recession levels across the UK, and are still falling in parts of the country.

The fact that fewer people are leaving their jobs helps to explain why the employment rate for older workers is increasing so much faster than for young people, says the TUC.

The report shows while the UK’s employment rate is rising, there are huge swathes of the country - particularly rural areas - where job creation remains depressed and is getting worse.

Inner London is the only area of the country where jobs are being created at a faster rate than before the crash.

In parts of the West Midlands, job creation is down by 31% and by 30% on Merseyside and the rest of the North West, the report shows.

The report also found that areas such as London, Birmingham and Tyne and Wear are recovering faster than their neighbouring rural areas.

Outer London, the South East and Eastern England have recovered since the crash but job starts are still 11%,16% and 21% below pre-recession levels.

Job creation across the rest of the country is more mixed, says the TUC.

Job creation in Tyne and Wear is recovering, though still 11% below pre-recession levels, but getting worse across the rest of the North East.

Job creation in the West Midlands area is recovering but the rest of the region continues to decline (down 31%), while South and West Yorkshire are both performing far better than the rest of Yorkshire and Humberside.

Job starts in Greater Manchester have fallen slightly since the height of the crash but the city is still doing far better than Merseyside and the rest of the North West, where job starts are 30% down on pre-recession levels.

The report also looks at job starts across different age groups, qualification levels and types of work.

It finds that while job creation rates for graduates are back above pre-recession levels, the number of people with lower-level qualifications starting new jobs declined during the boom and has continued to deteriorate since the crash.

The proportion of jobs starts to non-permanent work is now higher than it was before the crash, with three in ten job starts in temporary work.

Fixed-term contacts are the most popular form of temporary work.

The TUC is concerned that the continuing shift from permanent employee jobs to self-employment and temporary work suggests the nature of the UK jobs market is changing permanently, rather than being a short-term response to the recession.

Hiring rates for 16-24 year olds, who traditionally have moved from unemployment into work at a far quicker rate than all other age groups, have declined considerably over the last 17 years.

People in their late 20s and early 30s are now finding work as quickly as younger people.

The report makes a number of recommendations to boost job creation and raise employment levels further, including offering targeted employment support programmes, such as a job guarantee for any young person out of work for at least six months.

Frances O’Grady, TUC General Secretary, said: “Many people assume that rising employment levels are simply down to more people getting new work.

“In fact, the recent recovery in our jobs market is mainly due to people holding onto their jobs, rather than finding new ones.

“This is great news if you want to keep earning as you approach retirement, but less positive if you’re trying to take your first step on the career ladder.

“Job creation is as important for people looking for work as it is for those already in work and looking to boost their incomes. It’s worrying that across huge swathes of the country - and particularly in rural areas - job creation levels remain depressed and that where jobs are being created far more are temporary positions than before the crash.

“We need to see far more high-quality jobs being created, not just in our cities but across the UK, if we’re going to achieve full employment and a return to healthy pay rises.

However, a spokesman for the Department of Work and Pensions said: “This report paints a misleading picture of the jobs market.

"The reality is we have record numbers of people in work, the number of private sector workers are up by more than two million since 2010, and this Government’s long-term plan to build a strong economy is working.

“Job vacancies rose by 116,000 over the past year, and it’s a sign of confidence among businesses up and down the country that they’re working hard to hold on to staff as well as taking on new workers.”